Chapter 13 Bankruptcy

If you have a steady income, Chapter 13 bankruptcy may be the best way to solve
your debt problems. When you file for Chapter 13, you agree to repay all, or a
portion, of your debts, over time, supervised by the bankruptcy court. Chapter
13 allows you to keep your property while you are using your income to repay
some or all of your debts, including missed payments.

If you are facing foreclosure on your home, Chapter 13 can provide a powerful
remedy. You can keep your home by proposing a repayment plan that includes your
missed payments, as long as you remain current on your mortgage. Chapter 13
repayment plans generally last either 3 or 5 years, depending on your
circumstances.

You may be able to reduce the amount you pay for your vehicle, paying its
replacement value over the life of your plan, rather than the amount you
actually owe.

You are protected from lawsuits, garnishments, and other creditor actions while
the plan is in effect. At the conclusion of your plan you receive a discharge.
This may include 䲩pping?your second and third mortgages, if they are
deemed to be unsecured based upon the current value of your home.

Contact Murrieta bankruptcy attorney Karen E. Lockhart at 951-698-5191, for a
free, CONFIDENTIAL evaluation to determine whether you qualify for a Chapter 13
repayment plan. Consultations are available by telephone or in person. Weekends
and evening appointments are also available.

CHAPTER 13 ELIGIBILITY

Any individual, even if self-employed or operating an unincorporated business,
is eligible for chapter 13 relief as long as the individual's unsecured debts
are less than $360,475 and secured debts are less than $1,081,400. These
amounts are adjusted periodically to reflect changes in the consumer price
index. A corporation or partnership may not be a chapter 13 debtor.

An individual cannot file under chapter 13 or any other chapter if, during the
preceding 180 days, a prior bankruptcy petition was dismissed due to the
debtor's willful failure to appear before the court or comply with orders of
the court or was voluntarily dismissed after creditors sought relief from the
bankruptcy court to recover property upon which they hold liens. In addition,
no individual may be a debtor under chapter 13 or any chapter of the Bankruptcy
Code unless he or she has, within 180 days before filing, received credit
counseling from an approved credit counseling agency either in an individual or
group briefing

ADVANTAGES OF CHAPTER 13

Chapter 13 offers individuals a number of advantages over chapter 7. Perhaps
most significantly, chapter 13 offers individuals an opportunity to save their
homes from foreclosure. By filing under this chapter, individuals can stop
foreclosure proceedings and may cure delinquent mortgage payments over time.
Nevertheless, they must still make all mortgage payments that come due during
the chapter 13 plan on time. Another advantage of chapter 13 is that it allows
individuals to reschedule secured debts (other than a mortgage for their
primary residence) and extend them over the life of the chapter 13 plan. Doing
this may lower the payments. Chapter 13 also has a special provision that
protects third parties who are liable with the debtor on "consumer debts." This
provision may protect co-signers. Finally, chapter 13 acts like a consolidation
loan under which the individual makes the plan payments to a chapter 13 trustee
who then distributes payments to creditors. Individuals will have no direct
contact with creditors while under chapter 13 protection.

WHEN DOES THE DISCHARGE OCCUR?

The timing of the discharge varies, depending on the chapter under which the
case is filed. In a chapter 13, the court generally grants the discharge as
soon as practicable after the debtor completes all payments under the plan.
Since a chapter 13 plan may provide for payments to be made over three to five
years, the discharge typically occurs about four years after the date of
filing. The court may deny an individual debtor's discharge in a 13 case if the
debtor fails to complete "an instructional course concerning financial
management." The Bankruptcy Code provides limited exceptions to the "financial
management" requirement if the U.S. trustee or bankruptcy administrator
determines there are inadequate educational programs available, or if the
debtor is disabled or incapacitated or on active military duty in a combat
zone.

"We understand you are going through a difficult time, and we're here to help."

We are a federally designated debt relief agency. We help consumers file for bankruptcy relief under the United States Bankruptcy Code.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult a bankruptcy attorney regarding your individual situation. Murrieta | Temecula bankruptcy attorney Karen E. Lockhart welcomes your phone calls and emails. Contacting us does not create an attorney-client relationship. Do NOT send confidential information to us until an attorney-client relationship has been established.